Is it unnecessary to purchase auto damage insurance after several years?
2 Answers
Whether it is necessary to purchase auto damage insurance depends on the model of the vehicle and the financial situation of the owner. Below are the relevant details: Age limit: Private vehicles older than 8 years are generally not covered. Although it is possible to purchase auto damage insurance for vehicles over 10 years old, the coverage amount will be very low due to significant depreciation. Few insurance companies are willing to cover vehicles over 10 years old, and compensation is provided on a proportional basis. Definition of auto damage insurance: Auto damage insurance refers to the compensation provided by the insurance company within a reasonable range when the insured or an authorized driver causes damage to the insured vehicle during an accident. Coverage scope: This insurance does not cover theft, robbery, standalone glass breakage, standalone wheel damage, etc. Therefore, not all vehicle damages will be compensated by the insurance company after an accident.
I've been driving a Volkswagen for seven years now. When I first bought it, I opted for collision insurance, paying over a thousand yuan in premiums every year. Now that the car's value has dropped to around 30,000 to 40,000 yuan, renewing the insurance doesn't seem cost-effective anymore. Due to rapid vehicle depreciation, the compensation from the insurance company is based on the current market price—at most, you'd get 10,000 to 20,000 yuan after an accident, yet the premiums remain just as high. I've done the math myself: for cars older than six years, the depreciation rate is too steep, and the premiums paid over a few years could practically buy another used car. Besides, I drive carefully, mostly in the city where the risk is low, and I choose good road conditions for occasional long trips. It's more practical to invest the saved money in regular maintenance, like changing tires or checking the brakes. My advice is to consider your car's brand and condition—for mid-to-low-end cars older than five or six years, collision insurance isn't necessary. It saves both hassle and money.
